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Alexandria Ocasio-Cortez's plans for excessive taxes on the superrich have been met with a great... [+] deal of approval.

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Political risks for rich people are escalating everywhere as they are increasingly singled out as scapegoats, blamed for all manner of undesirable developments and attacked as the representatives of “abhorrent” capitalism. The Democratic presidential candidate Elizabeth Warren recently proposed an Ultra-Millionaires Tax of 2% per year on households with net assets of at least $50 million and 3% on wealth of $1 billion or more. Alexandria Ocasio-Cortez, the darling of radical left-wing Democrats, has suggested an income tax of up to 70% on incomes above $10 million. And Bernie Sanders, a self-avowed socialist, also repeatedly attacks the rich in his speeches.

Wealthy Europeans Are Also Coming Under Attack

In Great Britain, Jeremy Corbyn and John McDonnell of the Labour Party are openly pursuing a radical socialist course. They have demanded six billion pounds of additional taxes on the top 5% of earners—they want to hike the current top rate of income tax from 45% to 50%. Corbyn used to be a great admirer of Venezuela’s Hugo Chávez and repeatedly praised Chávez’s concept of “Socialism for the 21st century.”

Meanwhile, in France, the left-wing politician Jean-Luc Mélenchon has proposed a top tax rate of 90% on incomes over €400,000. And one of the Yellow Vest movement’s key demands is a punitive wealth tax on the rich.

And in Germany, the chairman of the youth organization of the Social Democrat Party, currently the junior coalition partner in Angela Merkel’s government, has called for the “collectivization” of large companies, including BMW. He has also demanded a ban on private real estate owners renting out the apartments they own. In the German capital, Berlin, a petition calling for a referendum on the expropriation of real estate companies that own more than 3,000 apartments has collected three times as many signatures as it needs. According to the referendum’s initiators, any compensation for expropriated property owners should be paid at a discount of about 70% against net asset value. And at this year’s First of May demonstrations in Berlin, posters were hung all over the city featuring a large guillotine and proclaiming: “Against a City of the Rich.”

The world’s rich are coming under increasing pressure. But why? Because they are being singled out as the symbolic targets of anti-capitalist hatred. Criticism of capitalism is once again en vogue and socialist ideologies are enjoying a renaissance. In a recent survey, a majority of young Americans said that they believe socialism, not capitalism, is the better system. German media enthusiastically celebrated the 200th anniversary of Karl Marx’s birthday and in his native city of Trier a huge monument was erected to the communist mastermind.

Anger at rich people and capitalism has many causes—but one key element is certainly the widespread misinterpretation of the roots of the financial crisis from 2008 onwards. The causes were complex and, in reality, they had far more to do with misguided central bank policies and politically motivated guidelines for granting loans than they did with “capitalism.” In times of crisis, it is often almost impossible for the general population to understand the reasons for societal collapse. And because they can’t understand, they look for scapegoats. This was just as true in the Middle Ages, when Europeans blamed Jews or witches for the plague and natural disasters as it is today, when “greedy bankers” and the “superrich” are the scapegoats.

After the collapse of socialism 30 years ago, capitalism was widely recognized as the superior economic system. Today these memories have faded. In schools and universities, young people learn all about the sins of colonialism and the deficiencies of capitalism, but very little about the failures of socialist systems. Young people, for example, frequently see socialism as an opportunity to solve environmental problems—but they are not aware that pollution in socialist countries was far greater than it has ever been in capitalist countries. And nobody tells them that more than a billion people have escaped the most bitter poverty through capitalist globalization in the past three decades.

Rich People Don’t Defend Themselves

One of the main reasons that socialist ideologies are gaining so much traction, however, is that the scapegoated capitalists, namely “the rich,” are doing so little to defend themselves. On the contrary, some—including George Soros—are actually leading calls for far higher taxes on the rich and laying the blame for the world’s ills at capitalism’s door. When such prominent figures appear in the media and call for redistribution, it cements the view that the rich are doing too well and that capitalism has failed. After all, people think that if even billionaires are saying it, then it must be true.

And unlike other minorities, the rich have not learned to defend themselves against defamation and prejudice. Some rich people believe that they can satisfy their haters and detractors by taking up the anti-capitalist mantle themselves or by appeasing their critics. Others simply choose to remain silent, passing up the opportunity to join the public debate.

At the moment, the United States’ economy is booming. But if there is another crisis, one thing is almost certain: “capitalism” and “the rich” will be the victims of widespread scapegoating. Unfortunately, a new financial crisis is impossible to rule out, especially as so little has been done to eliminate the real causes of the 2008 crisis. In fact, the situation is worse than it was in the run-up to the last crisis: levels of government and company indebtedness are actually higher now than they were pre-2008 and central banks’ expansive monetary policies have led to massive misallocations and bubbles. If a new financial crisis rears its very ugly head, politicians, the media and intellectuals will already know who to blame: “the rich.” At that point, life could become very dangerous indeed for society’s richest members.

I was awarded my first doctorate in history in 1986 and my second, this time in sociology, in 2016. I started my career at the Central Institute for Social Sciences

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I was awarded my first doctorate in history in 1986 and my second, this time in sociology, in 2016. I started my career at the Central Institute for Social Sciences Research at the Free University of Berlin and went on to become department head at one of Germany’s leading daily newspapers, Die Welt. In 2000, I founded my own company, which I established as the market leader in the field of communication consultancy for real estate companies in Germany, with a roster of clients that included Ernst & Young Real Estate, CBRE and Jamestown. I sold the company in 2016 and have focused on academic research and writing books ever since. In total, I have written and edited 22 books, the most recent of which are The Wealth Elite and The Power of Capitalism. My books on the psychology of success and wealth have been translated into a host of languages and have enjoyed notable success in China, India and South Korea. I am also a regular contributor to numerous prestigious European media outlets, including the Neue Zürcher Zeitung in Switzerland, The Daily Telegraph in the UK and the Frankfurter Allgemeine Zeitung in Germany.